Albany budget banks on $12.5M from state, new trash fee

Mayor Kathy Sheehan says "we cannot balance the budget" without state help

By Jordan Carleo-Evangelist

Updated 11:02 pm, Thursday, October 1, 2015

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Albany Mayor Kathy Sheehan speaks during the groundbreaking ceremony to celebrate construction of a new athletic field at the Albany High School track on Tuesday, July 21, 2015, in Albany, N.Y. (Olivia Nadel/ Special to the Times Union) less

Albany Mayor Kathy Sheehan speaks during the groundbreaking ceremony to celebrate construction of a new athletic field at the Albany High School track on Tuesday, July 21, 2015, in Albany, N.Y. (Olivia Nadel/ ... more

Albany Mayor Kathy Sheehan answers questions during a budget hearing on local governments before the Joint Fiscal Committees of the State Legislature Wednesday morning, Feb. 25, 2015, at the Legislative Office Building in Albany, N.Y. (Skip Dickstein/Times Union archive) less

Albany Mayor Kathy Sheehan answers questions during a budget hearing on local governments before the Joint Fiscal Committees of the State Legislature Wednesday morning, Feb. 25, 2015, at the Legislative Office ... more

Mayor Kathy Sheehan is banking on an infusion of $12.5 million in new state aid next year — money that has not yet been committed — to stave off a state control board or, she said, "grave" cuts would threaten Albany's future.

"We've cut the fat, we've cut some of the meat, and any additional cuts aren't just to the bone, they're to the marrow," Sheehan said as she unveiled her $180.6 million budget. "We will be insolvent without that $12.5 million."

The budget holds the line on taxes, but also includes a new annual trash fee for small apartment buildings.

The $12.5 million would not be an advance on aid the state already owes the city — a path taken in the past — but rather a new revenue line of "Capital City Funding" to compensate Albany for the services it provides to the state's expansive holdings of tax-exempt property.

"We are asking for what we believe is fair compensation and fair deal for supporting the capital city," Sheehan said.

A spokesman said Gov. Andrew Cuomo would "review the situation and the mayor's request in the context of the 2016-2017 budget," which will be out in January.

But the mayor's critics on the Common Council swiftly panned her decision to rely so heavily on money that does not yet exist.

Councilman Judd Krasher, who represents the 11th Ward, called the document "a gamble," not a budget.

Overall, the city's $56.8 million tax levy, the total collected from property taxes, would not increase. Homeowners, however, would still see their tax bills rise an estimated penny per $1,000 of assessed value — or $1.50 on a $150,000 home — because of the city's differing tax rates for homes and businesses.

Owners of apartment buildings with 2 to 4 units would face a new $180 per-unit annual trash fee for up to three apartments. The first unit would be exempt, meaning the cost would be $540 for four units, $360 for three and $180 for two. Single-family homes would pay nothing.

Sheehan said that would produce an estimated $1.5 million in new revenue — only enough to cover the costs of collecting trash at those buildings.

Council President Pro Tempore Richard Conti, who represents rental-rich Center Square and surrounding neighborhoods, said one of the council's challenges in the coming weeks will be examining the mechanics of "how that fee works."

Commercial properties, which already pay for their own trash collection, would see their property taxes drop an estimated 0.9 percent, or roughly 13 cents per $1,000 of value.

Apartment buildings with more than four apartments also already pay for private trash collection.

The budget's impact on city tax rates won't be known until December.

Sheehan said the city has already saved as much as it can without cutting in ways that jeopardize its future growth, like dismantling the police department's popular Neighborhood Engagement Unit.

The spending plan includes $800,000 in savings from a soon-to-be-rolled-out electronic time-keeping system and $300,000 from an agreement to purchase solar power — energy savings expected to more than double in future years, she said.

For the first time since 2007, Sheehan said, the budget doesn't tap city reserves, which the state comptroller said were drained by a worrisome $10 million in 2014.

That was further depleted this year by revenue shortfalls, including the planned sale of land in Coeymans to the state for $3.7 million instead of the budgeted $5 million.

Overall spending would increase by $4.3 million, or about 2.4 percent, over this year — driven largely by increases to health insurance, workers compensation and an arbitrator's award in April that granted firefighters raises retroactive to 2012 and 2013, Sheehan said.

But when you exclude $936,000 in federal money to hire new firefighters, that growth dips to 1.9 percent.

The budget also proposes a new penalty for rental property owners who fail to get occupancy permits and a renewal fee for expired building permits, part of a projected $933,000 increase in code enforcement revenue. It also counts on a nearly 4.2 percent growth in sales tax.

Common Council President Carolyn McLaughlin said she is prepared to do whatever is necessary to lobby the state for the additional aid to avoid the grim alternative.